The Glue

Wyeth Discusses Their Balanced Scorecard

In a recent KMWorld.com article Wyeth's senior director of clinical strategy management discussed their adoption of the Balanced Scorecard and how they manage it.

Here are some excerpts from the article, entitled Knowledge management: a multifaceted remedy:

• "Wyeth Pharmaceuticals was looking for a way to make improvements throughout its worldwide clinical organization, targeting such areas as customers, finances, internal processes (including personnel) and technology."
• "One approach that interested the company was the balanced scorecard. "It is a well-known methodology ensuring you’re on track for achieving your strategic objectives," says Jennifer Peck, senior director of clinical strategy management at Wyeth."
• "Tracking can be accomplished via spreadsheets, but that approach is labor-intensive and often means spending more time collecting data than analyzing it."
• "When the company looked for a way to automate the process, it didn’t have to look far. One division of Wyeth was already using the personal scorecard module from ActiveStrategy in the research and development side of the business. To get a more holistic view of the company’s strategic progress, Wyeth chose ActiveStrategy Enterprise, a Web-based balanced scorecard that enables authorized users to input data from any location via a Web browser."
• "The application is a key tool used in monthly performance discussions. It includes dashboards, charts and visual representations of the organization’s strategic plan to help present and discuss important trends."
• "The application enables Wyeth to measure adherence to strategy development across its worldwide offices by enabling authorized executives, managers and frontline employees to input information, freeing Peck and her team to interpret the data and make recommendations for improvements."
• "This allows for greater communication and alignment of practices with Wyeth’s global vision," Peck adds. "For us, this is very critical. It’s a very effective tool."

Read the full article at: http://www.kmworld.com/Articles/Editorial/Feature/Knowledge-management-a-multifaceted-remedy--49229.aspx

Are Quality Awards Worth the Effort?

We've seen a recent rise in interest level among our clients in quality awards, both at the national level (Baldrige in the US and NQI in Canada), as well as at the state level.

Why would already busy companies pursue such demanding awards?

What do they really get out of winning?

To start with, studies have shown that organizations that use a quality award process perform consistently better over time. Here is a summary of one such study (from The Alliance for Performance Excellence website; data from Singhal and Hendricks Study):

Many organizations that use a quality award process as a basis for continuous improvement have achieved :            

• 59% Higher Stock Price
• 111% Higher Operating Income
• 116% Higher Sales
• 114% Higher Total Assets         

If that's not proof enough that these systematic processes are worth the effort, our award-winning clients, as well as those that have just begun their journeys toward performance excellence, all say the same thing: the journey is the prize. There are so many benefits that they derive along the way:

The Engine That Powers Balanced Scorecards

Ever wonder why some organizations are so excited about the results of their Balanced Scorecards and others decry the tool as ineffective?

Clearly, there are a number of reasons why scorecards fail, such as not having senior management buy-in, not having the top-level scorecard aligned to the strategic plan, not deploying the scorecards to all key departments, and not performing scorecard reviews on a monthly basis to drive accountability for the proper actions.

However, even when an organization avoids all of the above pitfalls,they must have the right "engine" in place, or Balanced Scorecards still won't work.

The engine behind the scorecard framework is a well-designed system of correlated, cascaded measures. These begin with top-level lagging (or outcome) measures that track performance of the strategic plan. They cascade through to mid-level measures, on to lower-level measures, and even all the way to identified root causes of under-performing measures.

ActiveStrategy Goes Mobile (And Gets Blogged by Wall Street Journal)

At our annual Client Conference last week, we demonstrated the very first enterprise performance management application for the iPhone.

This is the first ActiveStrategy product optimized to run natively on a mobile device. So why did we pick the iPhone?  There are several key reasons:

1. The user-friendly, large display shows our Dashboards and Scorecards far better than any other mobile device can.
2. Since this will be a native app on the iPhone (versus an application optimized for a web-enabled mobile device), executives can view it anywhere -- even offline. Since so many of our users are high-level executives who tend to be on-the-go, they can prep for business reviews anywhere -- even at 30,000 feet.
3. Apple recently announced their enterprise roadmap, which we believe is going to make it a far more viable option for business users in the very near future.
4. Everyone loves the iPhone. We wouldn't be surprised if a few executives out there are just looking for a reason to tell their IT shop to support them. So this can be their reason!

Is Strategy Execution Anyone's Full Time Job in a Hospital?

Virtually all hospitals and health systems have full-time staff responsible for developing strategy. These VPs and Directors of Strategic Planning work in concert with their CEOs, Executive Teams, and Board Members to create what is often a 100+ page document we're all used to seeing.  Unfortunately, what we're not used to seeing is a single person who has the full-time job of executing that strategy. 

After years of working with our nation's largest and smallest hospitals, my advice for all of these organizations is to appoint a "Strategy Execution Officer" (an SEO). This person's job would be to address two themes that I see across all hospitals: a lack of understanding of the effort it takes to execute strategy and a lack of accountability for doing it.

In a nutshell, here are the major responsibilities for the SEO:

How to Measure the Hard to Measure: Part 3 - Strategies for Too Many Measures

In my last post on How to Measure the Hard to Measure, I focused on strategies for narrowing large quantities of measures down to the critical few for a Balanced Scorecard. Here are some approaches to consider with this issue:

One approach is to use a measure that focuses on HOW MANY of the child measures actually hit their targets.  Now, rather than having a green indicator that hides the red performance of one of 10 child measures we talked about earlier, we would actually see that 9 out of 10 of the children met their goal. That might give me a better feel for what is going on and at the very least makes me feel more comfortable that I'm not missing anything if the measure stoplight is green (this approach is called "percent of measures which achieved target" in ActiveStrategy Enterprise).

Hospital Scorecards Should Reflect CMS P4P Plan

I have spoken with many hospitals who are working hard to prepare their balanced scorecard systems for POA requirements and IPPS payment reforms. There’s another subtle change affecting reimbursement that hospital executives should have their scorecards reflect.

At the March 6, 2008 Senate Finance Committee roundtable, AHA said the goal of the CMS P4P plan should be to improve performance, not to cut the program’s budget. Their recommendation is to award points on any required safety or quality measure for both performance AND improvement over a baseline.

This concept is very much in line with the spirit and structure of the balanced scorecard, where measures are evaluated based on trend analysis, looking for sustained improvement over time.

This will require two efforts:

• show the baseline performance on your scorecard
  
• provide training to department leaders to discuss the trend during performance discussions

Strategy Execution is a Change Process - Part I

In this series of posts, I will be viewing a Strategy Execution implementation through a Change Management lens.

For those versed in change, most will have read Kotter's books.  In his latest installment, he outlined the eight "Stages of Change."  They include:

1. - Sense of Urgency
2. - Guiding Coalition
3. - Developing a Vision
4. - Communicating the Vision
5. - Empowering Employees
6. - Short Term Wins
7. - Consolidating Wins
8. - Anchoring in the Culture

So, let's tackle number one.  In the Strategy Execution Journey, the first step is gaining executive buy-in and support.  Unless you're in an organization where the top executive has been possessed by the force for change, this can be tricky.  Many consultants, myself included, preach the concept of identifying and leveraging an organization's 'burning platform.'  However, Kotter makes what I believe is an important distinction. 

How to Measure the Hard to Measure: Part 2 - Large Quantities of Measures

In my previous Part 1 post on measures, I discussed Measuring Project-based Objectives. This time I'll talk about how to deal with the omnipresent problem of too many measures.

Ideally, Strategy Execution projects include a lot of time of figuring out what critical few objectives are important to an organization and picking a few measures. Sometimes, however, there are industry standard measurement frameworks that are designed to make it easier to compare performance across different organizations.  These frameworks serve a great purpose and can really help define focus in an organization. But if you are not careful, you may find that the sum of the parts is not really a useful tool to help get the results you are looking for.

Take HEDIS, (Health Plan Employer Data and Information Set) for example. This is a set of more than 60 measures (the number changes with new releases) that indicates everything from how fast a health plan answers a phone to how well they screen their members for cancer.  It's a great tool for businesses to compare health plans and many health plans work hard to improve their numbers.  There are lots of other examples of such frameworks in hospitals, IT Organizations, Government and many other categories and the dangers we are talking about apply to them as well.

In an ideal world, the HEDIS measures might be sprinkled across many different scorecards in the organization -- owned by those accountable for them.  So the director of the call center might own the two or three metrics related to that, the Chief of Cardiology Standards might own the few related to heart treatment, etc.  Invariably, though, top executives want a single number that tells them "how we are doing on our HEDIS measures."

Identifying Strategic Outcomes

I have been receiving some great feedback on my new book, Executing Your Strategy, and I wanted to share an important related idea that I believe we tend overlook in the process of developing effective strategy maps: arriving at clearly stated, agreed upon outcomes is critical.

The strategy mapping process should focus explicitly on identifying required, but unmet, stakeholder outcomes. Since this result is so crucial to an organization’s strategic success, it is equally important to review all the supporting decision processes and information surrounding outcome identification and selection.

Understanding who the strategically determined stakeholders are and the important opportunities for improving their satisfaction enables the process to move from ambiguous outcome statements (e.g. “… to be the global leader”) to tangible and assignable actions directed toward that end (e.g. “…to achieve 35% global market share within two years”). Once outcomes have been so clearly defined, the organization may begin sorting out the key drivers and value creating activities that are most likely to achieve the final outcomes.